FERM - Ch.9: Some Useful Statistics (background only)


#1

A Fellowship Forums Wiki Community Post

Online Link to this Reading: N/A

Topics Covered in this Reading:

  • Location
    • Mean
    • Median
    • Mode
  • Spread
    • Variance
    • Range
  • Skew
  • Kurtosis
  • Correlation
    • Pearson’s Rho
    • Spearman’s Rho
    • Kendall’s Tau
    • Tail Correlation

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#2

Hi, are people memorizing the formulas for sample/population mean, variance, skew, etc…?


#3

I personally would not spend too much time on this. Good to read over and have a general understanding, but you should already mostly be familiar with this. Knowing sample variance is probably a good idea because that might pop up the odd time, but I did not spend any/much time memorizing things like skew, kurtosis, etc. Just my $0.02.


#4

Agreed! Sample and population mean and variance come up a lot, but I don’t foresee us needing to calculate kurtosis or skew. If we do, I’d bet they would give us the formulas to use and then ask us to opine on the results.

One thing I would like to bring up related to this, though - make sure you know the difference between population and sample variance! The SOA is not shy about taking off points if you use the wrong variance formula, so know when you should divide by n rather than n-1. And please let me know if you’d like a discussion on the difference between these two, as they are not always intuitive :slight_smile:


#5

Agree with previous comments and will also add: all of numerical concepts covered in FERM Ch. 9 get discussed more thoroughly in other readings. I think it is smartest to study FERM Ch. 9 before any other reading that covers or relies on these basic statistical topics. In our online seminar, we have ordered lessons like this in a logical sequence that lets them build on one another. By the time you cover other readings that we have sequenced after FERM Ch. 9, I think all of the concepts in FERM Ch. 9 will just make sense without requiring any further memorization.

Note that the ERM syllabus itself does not necessarily order the readings in any logical sequence, so it’s helpful to study readings like this one in a specific order that allows them set up other readings. This lets you get the most out of your study time.